Indonesia eases coal export ban, allows release of 14 vessels

It will re-evaluate the reopening of the coal export on Wednesday.

Indonesia on Monday eased the ban on exporting coal and allowed the release of 14 vessels for export, according to an Indonesian government official.

“As of today (10 January), seeing the condition of (state-owned electric company Perusahaan Listrik Negara) PLN’s supply which is much better, for 14 ships that already have a full load of coal, and have been paid for by the buyer, be immediately released for export,” Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said in a statement.

Luhut, however, said that the number of ships must be verified by the directorate-general of Mineral and Coal, and of Sea Transportation. 

Barges that load coal for export, meanwhile, are still not allowed to export as it is still directed to meet the needs of electric steam power plants or Pembangkit Listrik Tenaga Uap (PLTU) that still need supplies, Luhut said.

He also said that the government will re-evaluate the opening of exports on Wednesday. 

Before deciding on opening the export, Luhut said the cross-ministerial team would also studying how the export be opened in consideration of the fulfilment of the domestic market obligation (DMO) and the exports of coal companies that do not have contract with PLN or whose coal specifications are not required the state power firm.

“So that on Wednesday, if the export opening is decided, it will still be done gradually,” he said.

Under the DMO, coal producers should allocate 25% of their output to the domestic market and sell for $70 per tonne at the maximum.

Luhut also said that the coal supply contract to PLN must use cost, insurance, freight for the coal supplier to shoulder the responsibility of logistics and delivery arrangements. PLN was also asked to buy coal from coal mining companies  that have good credibility and commitment to compliance.

All coal contracts for PLN including independent power producers in 2022 have been confirmed  along with the monthly allocation for each coal supplier and to the electric steam power plant Pembangkit Listrik Tenaga Uap, 14 after export was opened, he said. The DMO fulfilment must be evaluated monthly by the energy and mineral resources ministry.

The Indonesian government imposed the coal export ban for January due to the low stocks of coal at power plants.